Ja valsts pie atvērta tirgus tur mākslīgu valūtas kursu, tad jāregulē cenas. Citādi sākas visādas nenormālības, un Latvijā tas notiek.
Lata devalvācija viena pati par sevi kā tāda – tās ir diletantu spekulācijas. Pilnīgi skaidrs, ka līdz ar devalvāciju jāveic arī citi pasākumi, kas nav tikai centrālās bankas kompetencē. Bet plašāk Ošlejs droši vien var izstāstīt.
It’s peculiar that the author claims that the undervalued lats “did not need appreciation” in 2005-2007. It stems from this that the Latvian economy “needed” the logical consequence of that – the enormous inflation. Possibilities for devaluation/revaluation should not be viewed separately from the fundamental value of the currency. At the beginning of 2005, when the lats was repegged to the euro, its market rate was undervalued due to an interplay between the dollar and the euro during the preceding months. This was an excellent opportunity to pick a revalued rate whilst changing the peg without causing any major panic. Not going for the normal ERMII fluctuation band of 15% was also a mistake. Full stop.
Vietnam has devalued again! http://ej.uz/v1c ..they are not reading your blog:( I know, you will argue: they have different economical fundamentals. I doubt.
So you are saying that every country is the same? Same resources, same efficiency levels, same access to markets and same exposure to markets? Same internal market size? I doubt.
Yup, there are much similarities and there are some drugs like aspirin helping to all patients in similar way. However, there are just few countries zombied with this ordo-liberal kind of thinking, prescribing ice and only ice to fever patients.
But every ice is melting. And even guys I hate nowadays start to tweet like this:
@akirstei Vjetnamiešiem nav jāieved S klases mersedesi un viņu bērni nemācās ārzemēs kā latviešiem, tapēc mierīgi var devalvēt.
Vietnam dong referenced to USD:
GDP composition agriculture: 21.3%; industry: 40%; services: 38.7%
labor force: 48.26 million
Export partners US 21.43%, Japan 11.44%, China 7.27%, Australia 4.43%, Germany 4.27%
Export commodities crude oil, marine products, rice, coffee, rubber, tea, garments, shoes
Import partners China 16.42%, Singapore 9.61%, Japan 8.96%, Taiwan 8.23%, South Korea 7.72%, Thailand 6.41%, Hong Kong 4.45%, US 4.27%
Taking in account the composition of GDP and products exported (mostly locally grown resources), it is evident how devaluation can help. Taking in account composition of export partners, it is clear that an internal devaluation would not work due to peg to dollar – see Argentina.
Latvia lat managed board to EUR
GDP composition agriculture: 3.8% industry: 21.9% services: 74.3%
labor force 1.186 million
export partners Lithuania 15.19%, Estonia 13.57%, Russia 13.17%, Germany 8.13%, Sweden 5.7%
export products wood and wood products, machinery and equipment, metals, textiles, foodstuffs
import partners Lithuania 16.36%, Germany 11.34%, Russia 10.68%, Poland 8.11%, Estonia 7.69%
import products machinery and equipment, chemicals, fuels, vehicles
Exports mostly to EUR or Euro associated countries, exporting processed goods, economy based on service provision, not resources.
GDP structure of both countries is fairly different, however lack of competitiveness due to high real exchange rate is similar. Usual and many times heard argument that we import a lot of raw material and energy paying with hard currency also is weak, especially if services in LV comprise 74% of GDP…
Internal devaluation hypothetically might be a good idea, but in reality it is not working. How big is a negative gain in CPI or average wages during “Latvian recession”? Peanuts.
So, we are entering into the new positive cycle without competitive cost of production. Possible results: growth through another speculative bubble or stagflation. Both scenarios are not desired. This is my only worry.
Average wages are still falling (lag effect). Rhetorical – Peanuts in what? nominal terms? % wise? compared to what? themselves or other states where wages continued to rise?
what about gains in productivity? ;) also having no effect?
BTW – how united is unity if you are in stark opposition to your own parties policy?
Fortunately in Vienotība there is still a competition of ideas and various approaches are welcomed in discussion:) Soon Latvia will come closer to more proactive monetary policy and Vienotība will be well prepared for that.
Komentāri (38)
Maris 18.08.2010. 15.54
Gansen hočet zajebaķ nam mozgi po-angļijski.
0
itommy_ 18.08.2010. 11.23
Hansena kungs ir fragmentārs.
Ja valsts pie atvērta tirgus tur mākslīgu valūtas kursu, tad jāregulē cenas. Citādi sākas visādas nenormālības, un Latvijā tas notiek.
Lata devalvācija viena pati par sevi kā tāda – tās ir diletantu spekulācijas. Pilnīgi skaidrs, ka līdz ar devalvāciju jāveic arī citi pasākumi, kas nav tikai centrālās bankas kompetencē. Bet plašāk Ošlejs droši vien var izstāstīt.
0
Andžs 18.08.2010. 11.20
It’s peculiar that the author claims that the undervalued lats “did not need appreciation” in 2005-2007. It stems from this that the Latvian economy “needed” the logical consequence of that – the enormous inflation. Possibilities for devaluation/revaluation should not be viewed separately from the fundamental value of the currency. At the beginning of 2005, when the lats was repegged to the euro, its market rate was undervalued due to an interplay between the dollar and the euro during the preceding months. This was an excellent opportunity to pick a revalued rate whilst changing the peg without causing any major panic. Not going for the normal ERMII fluctuation band of 15% was also a mistake. Full stop.
0
Liāna Tūtiņa 18.08.2010. 11.19
Vietnam has devalued again! http://ej.uz/v1c ..they are not reading your blog:( I know, you will argue: they have different economical fundamentals. I doubt.
7
vjachiks > Liāna Tūtiņa 18.08.2010. 11.53
So you are saying that every country is the same? Same resources, same efficiency levels, same access to markets and same exposure to markets? Same internal market size? I doubt.
0
Liāna Tūtiņa > Liāna Tūtiņa 18.08.2010. 15.12
Yup, there are much similarities and there are some drugs like aspirin helping to all patients in similar way. However, there are just few countries zombied with this ordo-liberal kind of thinking, prescribing ice and only ice to fever patients.
But every ice is melting. And even guys I hate nowadays start to tweet like this:
@akirstei Vjetnamiešiem nav jāieved S klases mersedesi un viņu bērni nemācās ārzemēs kā latviešiem, tapēc mierīgi var devalvēt.
0
vjachiks > Liāna Tūtiņa 18.08.2010. 15.36
Much similarities? Lets see:
Vietnam dong referenced to USD:
GDP composition agriculture: 21.3%; industry: 40%; services: 38.7%
labor force: 48.26 million
Export partners US 21.43%, Japan 11.44%, China 7.27%, Australia 4.43%, Germany 4.27%
Export commodities crude oil, marine products, rice, coffee, rubber, tea, garments, shoes
Import partners China 16.42%, Singapore 9.61%, Japan 8.96%, Taiwan 8.23%, South Korea 7.72%, Thailand 6.41%, Hong Kong 4.45%, US 4.27%
Taking in account the composition of GDP and products exported (mostly locally grown resources), it is evident how devaluation can help. Taking in account composition of export partners, it is clear that an internal devaluation would not work due to peg to dollar – see Argentina.
0
vjachiks > Liāna Tūtiņa 18.08.2010. 15.36
Latvia lat managed board to EUR
GDP composition agriculture: 3.8% industry: 21.9% services: 74.3%
labor force 1.186 million
export partners Lithuania 15.19%, Estonia 13.57%, Russia 13.17%, Germany 8.13%, Sweden 5.7%
export products wood and wood products, machinery and equipment, metals, textiles, foodstuffs
import partners Lithuania 16.36%, Germany 11.34%, Russia 10.68%, Poland 8.11%, Estonia 7.69%
import products machinery and equipment, chemicals, fuels, vehicles
Exports mostly to EUR or Euro associated countries, exporting processed goods, economy based on service provision, not resources.
still do not see a difference?
0
Liāna Tūtiņa > Liāna Tūtiņa 18.08.2010. 15.57
GDP structure of both countries is fairly different, however lack of competitiveness due to high real exchange rate is similar. Usual and many times heard argument that we import a lot of raw material and energy paying with hard currency also is weak, especially if services in LV comprise 74% of GDP…
Internal devaluation hypothetically might be a good idea, but in reality it is not working. How big is a negative gain in CPI or average wages during “Latvian recession”? Peanuts.
So, we are entering into the new positive cycle without competitive cost of production. Possible results: growth through another speculative bubble or stagflation. Both scenarios are not desired. This is my only worry.
0
vjachiks > Liāna Tūtiņa 18.08.2010. 17.21
Average wages are still falling (lag effect). Rhetorical – Peanuts in what? nominal terms? % wise? compared to what? themselves or other states where wages continued to rise?
what about gains in productivity? ;) also having no effect?
BTW – how united is unity if you are in stark opposition to your own parties policy?
0
Liāna Tūtiņa > Liāna Tūtiņa 20.08.2010. 19.19
Fortunately in Vienotība there is still a competition of ideas and various approaches are welcomed in discussion:) Soon Latvia will come closer to more proactive monetary policy and Vienotība will be well prepared for that.
0
gluhiha 18.08.2010. 10.41
IR could have added the link to article you mention at the end
0